PROJECT SUMMARY/ABSTRACT Determining the clinical effectiveness of mesenchymal stem cells (MSCs) and their mechanism of action in treating refractory lupus is of significant importance. We and others have reported reproducible improvement in murine models of lupus following allogeneic MSC infusions from healthy mice or humans. Infusion of MSCs, derived from bone marrow or umbilical cords, in more than 100 treatment-refractory lupus patients has resulted in positive clinical benefit in 65-75% of those treated. However, a placebo-controlled trial of MSCs in lupus has not been performed to show definitively that MSCs are more effective than standard of care. One clear result from multiple trials of MSCs to date is that they can be given safely with almost no serious adverse events. The preclinical data, the uncontrolled trials and the safety profile create a mandate for a controlled trial to test the efficacy of MSCs as a therapeutic for lupus. Critical to this trial are mechanistic studies to define how MSCs impact disease. Prior studies in lupus and rheumatoid arthritis reported increased circulating Treg cells, decreased Th17 cells, decreased TFH cells and fewer activated B and plasma cells in patients after MSC infusion. The mechanism by which these cellular effects occur is unknown. We have found that lupus patients have decreased circulating levels of glycoprotein A repetitions predominant (GARP)/TGF? complexes. MSCs express GARP, and GARP is a major determinant of TGF? bioactivity and also has important enhancing effects on Treg number and function. We hypothesize that allogeneic MSC infusion, plus standard of care, will prove significantly more effective in treating lupus patients with active disease than standard of care alone. We further hypothesize that effects of MSCs in lupus occur via modulation of regulatory and pathogenic T and B cells through upregulation of GARP expression, resulting in enhanced TGF? bioactivity and increased Treg numbers and activity. To test these hypotheses, our specific aims are to: 1. Determine the safety and efficacy of mesenchymal stem cell therapy in a two-dose escalation double- blind placebo-controlled multi-center trial as a treatment for lupus patients with moderate to severe disease activity unresponsive to standard of care therapy compared to ongoing standard of care. 2. Define mechanistically how MSCs modulate regulatory and pathogenic T and B cells in lupus patients and the role of GARP-mediated TFG? bioactivity in this process. The proposed trial will be performed in six academic centers that are all skilled, successful and experienced in performing lupus trials. If we confirm that MSC therapy is as effective as reported, then MSC infusions may become an alternative therapy for lupus. The detailed mechanistic analysis will provide novel insight into the complex cellular matrix in lupus and the impact MSCs have on these cellular interactions. There is a defined FDA pathway for licensing cellular therapies allowing this therapy, if effective, to be translated to the clinic.